Another week of higher mortgage rates is good news for the economy

risingrates

Mortgage interest rates rose again in line with more positive news from the economy and the recovering housing sector – especially new home starts and existing home sales.

The average interest rate on the 30-year fixed-rate mortgage (FRM) was 3.66 percent for the week ending Aug. 23, with an average 0.7 point, up from last week’s 3.62 percent.

Last year at this time, the average 30-year FRM interest rate averaged 4.22 percent.

“The Census Bureau reported that residential building permits were up in July, although builders slowed the pace of construction starts on one-family homes in July to the least since March while apartment and condominium building picked up to the most since April,” said Frank Nothaft, vice president and chief economist at Freddie Mac.

Existing home sales rose in July from June’s eight-month low and the median sales price jumped 9.4 percent from a year earlier, representing the largest 12-month gain since January 2006,” Nothaft added.

Meanwhile Financial information firm Markit said this week it’s Flash US Manufacturing PMI (Purchasing Managers’ Index) rose a half point, beating expectations and came despite sluggish overseas demand for American goods. Manufacturing is a major component of the U.S. economy.

Economists are also banking on the Fed to unveil new bond buying to bolster slow economic growth, as early as mid-September, during it’s next meeting, if hiring doesn’t improve.

The average rate on the 15-year FRM was 2.89 percent, with an average 0.7 point, up from last week, when it averaged 2.84 percent. A year ago at this time, the 15-year FRM was 3.44 percent.

The 5-year Treasury-indexed hybrid’s adjustable rate (ARM) was 2.80 percent this week, with an average 0.6 point. It was up from last week when it averaged 2.76 percent. The 5-year ARM averaged 3.07 percent a year ago.

Finally, for the week ending Aug. 23, Freddie Mac reported the 1-year Treasury-indexed ARM averaged 2.66 percent, with an average 0.4 point, down from last week’s 2.69 percent, and down from 2.93 percent a year ago.

About the author

DeadlineNews.Com's Interest Rate Writer Corbin Perkins is an intern from Leigh High School. Contact him at CorbinPerkins@DeadlineNews.Com.

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